Delta hedging

A method used by option writers to hedge risk exposure of written options by purchase or sale of the underlying instrument in proportion to the delta. An option is delta hedged if an offsetting position has been taken in the underlying asset in proportion to the option´s delta, creating, at that moment in time, a position that is immune to small changes in market direction.
Such a position means that there is no exposure to directional movements in the underlying instrument. Note however, that this does not mean that there is no risk attached to such a position. Option deltas change for a variety of reasons, and so the portfolio must be constantly readjusted in order to maintain a delta neutral position.